Debt Limit May Not Be Increased Until October, Chuck Grassley Says

(Bloomberg) -- Senate Finance Chairman Chuck Grassley said Monday that Congress probably won’t raise the federal debt limit until at least this summer, and possibly not until Oct. 1.

The debt limit comes back into effect March 1 after being suspended by Congress, but the Treasury Department can use so-called extraordinary measures to prevent a default on payments for months beyond that. Grassley’s committee has jurisdiction over the debt limit.

“It is probably more apt to be part of the budget negotiations that go on around here, and it probably won’t be settled until the summer because of the ability of the government to transfer funds from retirement, for instance, to stop us from borrowing money,” said Grassley, an Iowa Republican.

He said Congress will be able to enact the increase when it is needed, “but it probably won’t be until Oct. 1.” Grassley didn’t say he had any new estimates from the Treasury on when an increase will be needed.

Grassley added that he would like to see expiring tax provisions attached to legislation increasing the debt ceiling.

To contact the reporter on this story: Erik Wasson in Washington at ewasson@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo, Justin Blum

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